BNI reshuffles its management<\/p>\n
JAKARTA (JP): Publicly listed state Bank Negara Indonesia
\n(BNI) reshuffled its management on Monday, appointing a new
\npresident and chief commissioner, paving the way for its costly
\nrecapitalization.<\/p>\n
The bank's shareholders ousted Widigdo Sukarman as BNI
\npresident at an extraordinary shareholders meeting, replacing him
\nwith the bank's planning director Saifuddien Hasan.<\/p>\n
The shareholders also removed four other directors as well as
\ntwo commissioners, including chief commissioner Arie Soelendro.
\nThe bank appointed Zaki Baridwan, an assistant to the rector of
\nGadjah Mada University, as chief commissioner.<\/p>\n
Replacing BNI's management is a condition for its
\nrecapitalization in the government's agreement with the
\nInternational Monetary Fund (IMF).<\/p>\n
Newly appointed BNI president Saifuddien said the
\nrecapitalization cost of BNI was expected to rise to about Rp 60
\ntrillion (US$8.3 billion) from the original projection of Rp 52.8
\ntrillion.<\/p>\n
"I hope the recapitalization of BNI can be conducted soon
\nbecause the later the recapitalization is materialized, the
\nlarger the recapitalization cost will be," Saifuddien said.<\/p>\n
Under its agreement with the IMF, the government will release
\nthe first tranche of its recapitalization bonds by March 31.<\/p>\n
The bonds, however, will be released only after the new
\nmanagement signs performance contracts with the government,
\nexpected by Feb. 29, after which Germany's Commerzbank AG will be
\nbrought in as an adviser to help implement the bank's business
\nplan.<\/p>\n
Commerzbank AG will work with BNI to improve governance, risk
\nmanagement and assess nonperforming loans.<\/p>\n
Wolfgang Rohde from the German bank has joined the Indonesian
\nbank's board of commissioners.<\/p>\n
The issuance of the remaining tranche of recapitalization
\nbonds will follow the completion of the 1999 year-end financial
\naudit, and implementation of the bank's business plan, expected
\nby June 30.<\/p>\n
The recapitalization of BNI, as well as other state banks, has
\nbeen delayed by the emergence of the high-profile Bank Bali
\nscandal and more recently the Texmaco case.<\/p>\n
BNI has especially been faulted for extending a huge Rp 9.6
\ntrillion in loans to one business group, textile conglomerate
\nTexmaco Group.<\/p>\n
Following the emergence of the Texmaco case, the government --
\nas the bank's majority shareholder -- called Monday's
\nextraordinary shareholders meeting to unseat Widigdo and his
\nmanagement team.<\/p>\n
In addition to Saifuddien, BNI's shareholders also retained
\nBinsar Pangaribuan on the bank's board of directors. Other
\ndirectors are all new faces, but all from within the bank. They
\nare Mohammad Arsjad, former head of the bank's strategic planning
\ndivision; Eko Budiwiyono, former head of the treasury division;
\nAgoest Subhektie, head of the internal supervision division;
\nRachmat Wiriaatmadja, former head of the international division;
\nand Suryo Sutanto, former head of the technology information
\ndivision.<\/p>\n
Market watchers said it was unclear as to whether appointing a
\nnew president and other directors from within the bank would meet
\nthe requirements of strengthening the management, as required by
\nthe IMF.<\/p>\n
Equity banking analyst Lin Che Wei from Socgen-Crosby
\nIndonesia said that ideally, the shareholders appoint an outsider
\nto lead BNI so that he or she would not face any psychological
\nbarrier to root out corrupt practices within the bank, especially
\nfollowing the emergence of the Texmaco case.<\/p>\n
Nevertheless, he said, the reshuffle would at least give
\nimpetus to the increasing transparency at the bank. He expects
\nthe market will be neutral to the management change.<\/p>\n
"Pak Saifuddien must prove to the market that he is a reformer
\nand is willing to take drastic moves to clean up the bank," he
\nsaid.<\/p>\n
BNI's stock price closed unchanged on Monday at Rp 300 a
\nshare. (03\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bni-reshuffles-its-management-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}